Returns on Spanish commercial property investments bounced back into double figures last year for the first time since the onset of the global financial crisis, latest figures from MSCI show.
Returns on Spanish commercial property investments bounced back into double figures last year for the first time since the onset of the global financial crisis, latest figures from MSCI show.
The index figure soared to 10.1% from just 0.3% in 2013, close to the 12.4% seen in 2007, the year before the crash.
Commercial property outperformed the domestic equity market, which returned an 8.9% return on MSCI’s data, but underperformed on bonds, which delivered a 24.5% return according to JP Morgan.
The rise was almost entirely attributable to a return to positive capital value growth, which increased by 4.2% in contrast to a 4.9% contraction in 2013.
Industrial was once again the best performing sector with a total return of 14.4%, while retail was the weakest sector with a return of 9.7%, though this was a considerable improvement on 2013’s figure of minus 1.5%.
Elsa Galindo, senior associate at MSCI, said: ‘After many years of negative and sometimes cataclysmic return levels, favourable trends in macroeconomic fundamentals seem to have had a positive impact on confidence levels within the real estate sector. Capital values have increased, driven by the recovery in fundamentals and by the high liquidity existing in the market.’
MISC’s IPD Spain Annual Property Index tracks the performance of 400 property investments with a total capital value of €11.5 bn at December 2014 and market coverage of between 40% and 50%.